November canola is up $8.10 per metric ton (mt), Dec soybean oil is up .84 cents per pound, November European rapeseed is up 6.25 euros per mt and October Malaysian palm oil is down .16%. Dec oats are up 1 3/4 cents per bushel. October crude oil is up $1.04 per barrel, October ULSD is up $.0305 per gallon, and the September Canadian dollar is down .00125 at .72165. The September U.S. Dollar Index is up .157 at 97.685 and the September Brazilian real is up .00105 at 0.18580.

Canola, soybean oil, soybeans and corn have all rallied on buying interest ahead of the WASDE release. Given the drought implications for final yield, not just today's estimate, short cover makes sense. Especially for corn with managed-money traders going into the report net short over 90,000 contracts or 450 million bushels (as of the Sept. 2 cutoff). Rumors that China and U.S. officials are set to meet in Spain from Sept. 14-17 are likely supporting prices as well.

Soybean oil received a boost (that spilled over into canola) from a 22,000 metric ton flash sale of soybean oil to South Korea announced at 8 a.m. CDT. I've said it enough times, readers are likely tired of it, but the strength in palm oil compared to soybean oil needs to be monitored. There is no room for a repeat of 2024-25 when USDA was expecting a soybean oil export total of 600 million pounds up until the first revision in December. It now stands at 2.55 billion pounds thanks to the record setting discount for soybean oil to palm oil that occurred last fall. This morning's flash sale was surely the result of the soybean oil premium to palm oil falling from a summer high of $248 U.S. dollars per metric ton to just $48 on Tuesday. USDA currently expects 2025-26 soybean oil exports to fall back to 700 million pounds due to limited supplies thanks to sharply higher biofuel production demand, with no room for a repeat of last year. Technically speaking, the bargain hunting by South Korea reinforces the validity of the saucer on the soybean oil continuation chart that's been years in the making. Significant gains would normally be expected from such formations.

Energy markets remain higher on news that Japan joined the EU and UK with increasing sanctions against Russia over the Ukraine war. With Russia exporting nearly 7 million barrels per day, the risks to that supply should provide underlying support for the foreseeable future.

In outside markets, it appears the concern over a hotter-than-expected headline CPI number is trumping concern over lower-than-expected consumer confidence and weak labor market data. Treasuries are lower as a result with the higher interest rates weighing on equities and supporting a slight rebound that started overnight in the U.S. dollar.

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